Redbox Parent Trialling 'Gizmo' eBay-in-a-Kiosk Concept

Coinstar, which operates the Redbox video kiosks, is trialing an "eBay-in-a-kiosk" concept called Gizmo, where discounted, refurbished electronic devices will be sold directly to customers.

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Coinstar, which operates the Redbox video kiosks, is trialing several concept kiosks, including "Gizmo, an "eBay-in-a-kiosk" concept, where discounted, refurbished electronic devices will be sold directly to customers.

Coinstar revealed its plans in an analyst meeting on Wednesday, when the company disclosed that it planned a streaming Redbox subscription video service that will debut later in 2011. Coinstar had previously disclosed its streaming plans, but not the form of the service.

Coinstar did not announce a partner for the streaming service, which reports have said may be Amazon.com.

Mitch Lowe, the president of Redbox, told analysts that the company was looking for a partner with access to "quality digital entertainment rights" and a technology platform. Executives also defended the length of the negotiating process, maintaining that the agreement simply required time to complete.

"The way we see it is this bundled product, this bundled subscription product where you get movies at the kiosk and these are -- you can take your choice of what we have, whether it's new releases, Blu-ray, et cetera, movies online, an unlimited streaming product online that supplements what you'd get at the kiosk," Lowe said.

Redbox has tried stocking older, evergreen titles, which give a burst of sales activity. But Lowe, the former vice president of business development at Netflix, said that streaming satisfied consumer demand for older titles.

"Not only do we think it's going to be great for our customer, but we think it's going to extend the life of our physical kiosk-based rentals. And it will do so primarily because it will address this need that customers keep telling us is we'd love more selection," Lowe said. "Give us older, classic titles but give us a lot of those."

Kiosk concepts include "Gizmo"

Coinstar, which installs its own coin-redemption kiosks in addition to the Redbox video-rental stands, also showed off a number of concept kiosks that the company either planned to launch or had installed on a trial basis.

Those automated kiosk concepts include a kiosk that can dispense a "real brewed" cup of coffee, Coinstar executives said, designed by the person who developed the Starbucks stands that are commonly found in grocery stores. Executives also disclosed "Chirp," a kiosk that would sell ladies merchandise to women shopping at grocery stores, with an inventory that would be completely replaced each week.

Coinstar executives also discussed "Face Cube," an Internet-connected photo booth, and EcoATM, a business that Coinstar invested in where older mobile phones and other electronic devices could be disposed of in exchange for cash.

And then there's "Gizmo," a kiosk that would take essentially compete with the Best Buy-branded kiosks that have appeared in airports and other locations, selling high-value electronic merchandise that doesn't take much physical space. Coinstar's target is what the company estimates to be a $150 billion consumer electronic market.

"[O}ne of the things that we've discovered is that there's a significant proportion of consumers in America that have never gone to eBay and will never go to eBay, yet are very interested in buying a consumer electronics device that might be three or four or five months
old, may not be right off the assembly line, or may not be just cutting-edge, but they'd get it at a significantly discounted value
and that's driving their interest," said Gregg Kaplan, the president and chief operating officer of Coinstar.

"So, for that market opportunity, we created something that we're calling Gizmo," Kaplan added. "And what Gizmo is is exactly what I just said, which is it's used and refurbished consumer electronic products. So think laptops, game consoles, Xboxes, GPS devices, digital cameras, iPads, iPods, those kinds of things, where they're offered at significant discounts. And these are refurbished products
which are also guaranteed for a quality perspective, so if you don't like the product, as a consumer, you can return it no questions
asked."

Coinstar launched three kiosks in grocery stores before Christmas, Kaplan said, and the design team will put eight to ten more in stores during 2011. The kiosk worked so well that a dummy machine - with absolutely nothing inside it - attracted a level of attention that satisfied the company, he said. He described Gizmo as an "alpha machine," and said the concept would be reworked possibly several times to get the look and feel right.

Face Cube, Chirp, and ecoATM

Coinstar has also launched four "Face Cube" kiosks in malls, where Kaplan said that the company was "very, very happy" with the results, and said that they plan to add about 10 more in 2011. Face Cube kiosks allow customers to take photos against a digital green screen, add their own custom backdrop and logo, print them at up to 8 x 10 sizes, and even post the completed images to Facebook.

Coinstar has also installed 15 Chirp kiosks, where the "find of the week" in everything from handbags to costume jewelry would be promoted to the typical grocery store shopper, which Kaplan said was typically a woman between 25 and 45.

"In the Redbox world, [a sales refresh] happens automatically because movies are coming out every week," Kaplan said. "It brings people coming back. In the Chirp world, we're going to force that refresh. Every week is a new product. It's the new great find of this week that our buyers have gone out and negotiated with the brands that you know and love."

"The consumer experience is very, very simple," Kaplan said. "You come up with your cell phone. On the touch screen you let it know that, hey, I have a Blackberry Bold or something like that and note the model number. The machine will ask you to put it in the casing
here. They will take a picture of it and compare it to their catalog of several thousand different phones and it can immediately
identify it and validate that it truly is, in fact, a Blackberry Bold, and then ask you to plug it in and electronically they can validate
that it's working, and, again, that it is the model that you said."

"At that point, the machine will offer you, let me make up a number, $25, at which point you can say yes or no," Kaplan added. "If you say yes, you get cash there right on the spot. The phone itself drops into the bin, and that's the transaction. Or potentially you could
get a gift card to the retailer that the machine is located at."

Mark Hachman Mark joined ExtremeTech in 2001 as the news editor, after rival CMP/United Media decided at the time that online news did not make sense in the new millennium.
Mark stumbled into his career after discovering that writing the great American novel did not pay a monthly salary, and that his other possible career choice, physics, required a degree of mathematical prowess that he sorely lacked.
Mark talked his way into a freelance assignment at CMP’s Electronic Buyers’ News, in 1995, where he wrote the...
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